The Green Book & ACH Payments - Amazon S3 · 2016-09-30 · The Green Book & ACH Payments Program Materials Use this document to follow along with the webinar presentation. Please

Your State Association Presents

The Green Book &

ACH Payments

Program Materials

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presentation. Please test your system before the broadcast.

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Tuesday, October 4, 2016 Presenter: Mary Kate Cole

Technical Support (for faster service please submit inquiries via email or online): (Registration & Tech Support): Email- support@conferenceedge.com, Phone- (877)988-7526 FOR ADDITIONAL ASSISTANCE PLEASE REFER TO OUR FAQs

Kate Cole, AAP

MK Cole Consulting

kate@mkcoleconsulting.com

612.910.9286

Green Book overview

Chapter 1 – Enrollment

Chapter 2 – Payment Processing

Chapter 3 – Non-receipt

Chapter 4 – Returns

Chapter 5 – Reclamations

Chapter 6 – Notification of Change

Chapter 7 – Contacts

Chapter 8 – Glossary

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This presentation and applicable materials are intended for general education purposes only and nothing in this presentation should be considered to be legal advice. Reference the NACHA Operating Rules and the Green Book for further information.

Comprehensive guide to FIs that receive and send ACH payments to the federal government

Comprised of the ACH Rules and 31 CFR 210, 208 & 370

https://www.fiscal.treasury.gov/fsreports/ref/greenBook/greenbook_home.htm

Last updated in 2016

All electronic

Updates on the website

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Enrollment is for those that are already receiving Federal Government Benefit Payments

Benefit Enrollment options: At the agency when they qualify for benefits At the financial institution via: ENR www.godirect.org Paper – SF1200 Telephone (customer must be present)

Payment Cycling

Corporate Enrollment – FEDI SF 3881

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ENR Standard Entry Class Code

You need to know your government agency

You need all data on person receiving benefits Only 15 characters of the last name Only 7 characters of the first name Social security number

Is there a Representative Payee?

What is the account number and type of account

Special return reason codes for ENR R40 – R47

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FI’s should be aware of the following: Enrollment in DD is not permanent; taxpayer must elect each filing

year Payments must be returned when they can not be properly posted!

NOCs can not be used to correct any information. The FI is responsible to post the DD to the account indicated on the

ACH Record. You have met your responsibility if you post based on account number.

If the taxpayer or the taxpayer’s agent gave the incorrect account information, neither FMS nor the IRS will assist the taxpayer with recovering the funds, and the taxpayer is free to pursue civil action. If, however, the IRS made the error, it will make the taxpayer whole.

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Financial institutions may close an account to which benefit payments are currently being sent thereby revoking the enrollment authorization by providing a 30-day written notice to the recipient prior to closing the account. In cases involving fraud, accounts may be closed immediately. The financial institution cannot revoke the enrollment authorization by notifying the Federal agency and not the recipient.

The 30-day written notice should remind the recipient to make other arrangements for the handling of his / her payments. The financial institution must credit to the recipient’s account any payments received during the 30-day notice period. The financial institution must also immediately return to the Federal government all payments received after the 30-day notice period. A financial institution that closes the account without properly termination the enrollment must make the funds available to the recipient until proper notice is provided.

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Financial Organization Master File (FOMF)

Derived from FRB’s ACH Customer Directory

Is your name, RT and contact information

Used for: Reclamation notices Trace inquiries Marketing material

FI is responsible for updating information

Info comes from FedACH Participation Agreement

www.frbservices.org/StandardForms/Index.html

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Prenotification Agencies will prenote according to the ACH Rules Social Security does for enrollments and changes

Payment Formats PPD, CCD & CTX

Account Requirements The name of the recipient or beneficiary must be

on the account, with some exceptions

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Misdirected Payment FI can move an entry to the correct account if you can

identify it, at your own risk Send an NOC to correct information FI is not required to verify name on account!

Notice of Misdirected Payment Notify the agency Return the entry

Availability of Funds Following the ACH Rules

Electronic Transfer Account (ETA) Low-cost account designed by Treasury

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Identify Treasury payments Company Batch Header – Regional Financial Center symbol

number = 310 (Kanas City), 303 (Philadelphia), and 312 (San Francisco) Originating DFI = in fields 5 and 6 there is a 3 and 6

Consumer Payment format = PPD and with addenda

Identifying the paying agency, see pages 2-11 to 2-13

Garnishments Determine the sum of protected Federal benefits Company Entry Description Field will have an XX in

positions 54-55 for funds that are exempt from garnishment

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Close to 75% of missing payments are at the FI Review records on and around the date the

recipient feels the payment should have posted

The recipient files a nonreceipt claim with agency Tele-TRACE Claim FMS Form 150.2 FMS Form 150.1

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General Information An enrollment is terminated if you return the entry You must return if you have actual or constructive

knowledge of the death or legal incapacity of a recipient or rep payee Return after you receive a DNE Return if the account is closed Return if you don’t have an active account for that

account number

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R02 – Account Closed

R03 – No Account/Unable to Locate Account

R04 – Invalid Account Number

R06 – Return per ODFI’s Request

R14 – Representative Payee Deceased or Unable to Continue in the Capacity

R15 – Beneficiary or Account Holder (Other Than Rep Payee) Deceased

R16 – Account Frozen

R17 – File Record Edit Criteria (Specify) & IRS Returns Opt-In Program

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Your official notification of the death of a recipient

DO NOT accept any entries after receipt of DNE

Watch your flags!

If you have knowledge of the death you must notify the government, a return meets that requirement

DNE Errors

Return ACH entries through ACH

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Partial payment from Notice of Reclamation

Done by check

NOT to the Originating Federal Agency, information is on the reclamation

Attach a cover letter

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You may receive a dishonored return

Most common errors Trace number Effective entry date Amount of payment Individual ID number

Dishonored Return Codes R61 – Misrouted return R67 – Duplicate return R68 – Untimely return R69 – Field errors R70 – Permissible return entry not accepted

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1. Contact the Federal Agency

2. Notify the recipient

3. If you returned an entry in error, you may have started the DNE process.

4. Initiate a new enrollment

TreasuryDirect will notify you in writing or electronic of an error or duplicate payment

Notice will include the following:Deposit account nameDeposit account numberDate and amount of improper payment

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If… Two identical ACH returns are made for the same

payment

Then… The Government Disbursing Office will

automatically return the duplicate return

And…No further action is required by the FI

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If… An ACH return was sent and the same payment was returned by

check The financial institution was debited for a payment that was

already returned

Then… The financial institution should promptly write a letter of

explanation to the Federal agency that authorized the payment and include copies of the following: FI’s claim for a refund Debit advice Other documentation to confirm the duplicate return

And… The FI awaits further notification from the authorizing Federal

agency.

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Social Security benefit or disability (SSA)

Supplemental Security Income (SSI)

Black Lung disability (Dept. of Labor)

Military and Coast Guard retirement, including allotments (DFAS)

Civil Service annuity (OPM)

Veterans Administration benefits (VA)

Railroad Retirement Board (RRB) annuity

US Coast Guard

Worker’s compensation (FECA)

DC Pensions

Compensation Act (Dept. of Labor)

Any other Federal retirement or annuity

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Payments not subject to reclamations Federal salary, allotments, and travel payments U.S. savings bond paymentsVendor/miscellaneous payments IRS tax refundsDiscretionary allotments Public Debt payments (TreasuryDirect)Other types of Federal ACH payments

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The RDFI is liable for ALL benefit payments received after the death or legal incapacity of a recipient or death of a beneficiary; unless the RDFI meets the qualifications for limiting its liability.

If the RDFI does not qualify for limited liability, they will be debited for the full amount of the reclamation; the debit action is final.

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An RDFI may qualify to limit their liability if…1. It certifies that it did not have actual or

constructive knowledge of the recipients' death or incapacity at the time of the deposit of any post-death benefit payments

2. It returns all post-death payments it receives after it learns of the death and…

3. It responds to the Notice of Reclamation completely and adequately, so it is received by the Government Disbursing Office within 60 days from the date of the notice.

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Agency sends with 120 calendar days after they have actual or constructive knowledge of the death of beneficiary

The RDFI has up to one day to react to reclamation

The RDFI can protest if they feel the agency did not meet the deadline

There is a 6 year limit to reclamations, but if there are funds in the account to cover the notice, you should pay it

RDFI has 60 days to respond

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If you can limit your liability, you will only be debited for the 45-day amount

The 45-day amount is the dollar amount of the post-death benefit payments received within 45 calendar days following the death.

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FI receives 4 payments of $200 each after death of beneficiary.

Total amount on the Reclamation is $800

Amount in account and paid by FI with Reclamation is $300

Amount due from account holders is $500

Amount collected from account holders is $250

Outstanding amount due is $250

Amount debited to the FI is $200

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FI receives 4 payments of $200 each after death of beneficiary.

Total amount on the Reclamation is $800

Amount in account and paid by FI with Reclamation is $300

Amount due from account holders is $500

Amount collected from account holders is $500

Outstanding amount due is zero

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FI receives 4 payments of $200 each after death of beneficiary.

Total amount on the Reclamation is $800

Amount in account and paid by FI with Reclamation is $750

Amount due from account holders is $50

Amount collected from account holders is $0

Outstanding amount due is $50

Amount debited to the FI is $50

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FI receives 4 payments of $200 each after death of beneficiary.

Total amount on the Reclamation is $800

Amount in account and paid by FI with Reclamation is $0

Amount due from account holders is $800

Amount collected from account holders is $0

Outstanding amount due is $800

Amount debited to the FI is $200

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An RDFI has constructive knowledge if the institution would have learned of the death if it had followed commercially reasonable business practices.

The phrase “commercially reasonable business practices” is a flexible concept since, for example, what is a commercially reasonable practice for a large bank may not be commercially reasonable for a small rural bank, and vice versa.

Return the entries using R14 or R15

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If payment has been madeGet a copy of front and back of any checksAnd / or receipt from the federal agency

If all payments have been paid the RDFI should not receive the reclamation

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Notice of Reclamation form carries a unique Reclamation Ticket Number

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If the person did not die, you need evidence Driver’s license, picture ID or other evidence similar to that

required for cashing a check, if they appeared at the RDFI A signed, dated and notarized statement attesting to the fact that the

recipient or beneficiary is alive if, he/she is unable to appear at the RDFI

A written statement from the authorizing Federal agency verifying that the recipient or beneficiary is alive

If the person has died and the date, month or year are wrong Send a copy of death certificate with Reclamation Write all of the information on the Reclamation

There may be a subsequent notice of reclamation

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Use an NOC for recurring benefitsC01 – Incorrect Account NumberC02 – Incorrect Routing NumberC03 – Incorrect RTN and Incorrect Account

NumberC05 - Incorrect Transaction CodeC06 – Incorrect Account Number and Incorrect

Transaction CodeC07 – Incorrect RTN, Incorrect Account Number

and Incorrect Transaction Code

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Follow the ACH Rules for creating an NOC

NOC should be processed within two payment cycles If not, confirm that you did not receive a refused

NOC

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Questions:

kate@mkcoleconsulting.com

612.910.9286

Your Regional Payment Association

Resources

https://www.fiscal.treasury.gov/fsreports/ref/greenBook/greenbook_home.htm

http://www.electronicpayments.org/

https://www.nacha.org/

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